VO VOLKSWAGEN Volkswagen AG Загрузка... : Бычьи и медвежьи мнения аналитиков

German automakers Mercedes, BMW and Volkswagen are losing ground in China, once their most important growth market, as Chinese consumers view their own electric vehicles as having better technology and faster development cycles. German companies are forced to cut costs as their huge China profits disappear and they remain in catch-up mode.

German automakers Mercedes, BMW, and Volkswagen are losing ground in their most important growth market, China. All three reported Q2 China sales declines of at least 30%. Chinese consumers now see domestic EVs as superior, with better technology and faster development cycles, leaving German brands with inferior offerings. Mercedes sold only about 2,000 units of its new electric car in H1, versus over 80,000 for a comparable Xiaomi model. The profit pool from China is disappearing, and companies are being forced into cost cuts at home because they cannot slash vehicle prices without hurting margins and stock valuations. Little evidence of a turnaround exists, and the strategy of becoming more Chinese via partnerships is falling short.

The combined market cap of German automakers has shrunk to the level of Hyundai Motor Group, indicating weakness in legacy automakers against Chinese competition.

Volkswagen is facing severe headwinds: vehicle sales in China down 31%, Chinese competitors taking a third of new European sales, tariff risks, inability to cut jobs or close factories, and full-year revenue guided down. The stock is at its lowest since 2010, with no clear turnaround in sight.

German automakers have totally lost the crucial Chinese market to local EV competitors due to pricing and competitiveness. They are closing factories, facing falling EBITDA, and generating negative free cash flow. They are classic value traps and should be avoided.

European automakers, especially Volkswagen, are under significant pressure from Chinese EV competition in the UK and Europe, with imminent cost cuts and potential layoffs expected.

Volkswagen's supervisory board meeting stopped short of concrete restructuring, failing to agree on plant closures or job cuts. The market had low expectations but VW undershot even those. The share price reaction is likely to be negative to muted as the company lacks a credible near-term cost-cutting plan.

The author agrees with a parent post suggesting Volkswagen faces a looming government-controlled arrangement that could lead to communist-level productivity issues.

VW's business model is no longer working because the Chinese market is declining and local manufacturers are taking share, European consumers are weak, regulatory burdens are heavy, and the company's 2024 restructuring plans are insufficient to compete with increasingly export-focused Chinese manufacturers.

Стратегия Volkswagen в отношении электромобилей в Китае предполагает экспорт электромобилей местного производства, однако соглашение о тарифах с ЕС отражает политическую сложность, а не торговую позицию.